Tiny Megaphone’s Joanna Rutter: Your B2B Audience is Tinier Than You Think

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The B2B SaaS space is enormous. Analysts at SkyQuest valued the global market at $240 billion in 2022 and forecast growth to $716 billion by 2028. But don’t let the total value of the industry fool you into thinking the market is teeming with opportunities. Most enterprise technology companies target a remarkably small audience. 

“Let's say you're going after a VP of operations in the retail industry who’s running a mid-market brand with more than 20 locations,” says Joanna Rutter, owner of marketing consultancy Tiny Megaphone. “Let’s call him Mark. How many Marks do you think there are? There’s 800. Maybe 1,500 in the entire world.”

According to SaaStr, the average enterprise SaaS company (those with ACVs above $100,000) has just 1,500 customers. Despite this small pool of buyers, Joanna says companies invest huge amounts of time, money, and energy marketing to a much wider audience than necessary.

I caught up with Joanna to discuss why this ill-targeted approach is failing and whether new strategies like product-led growth (PLG) and account-based marketing (ABM) could drive more sustainable growth.

This interview has been edited for length and clarity.

What’s the problem with targeting a wide audience?

The premise of a lot of B2B marketing is to gobble up the maximum market share possible as quickly as possible, because that’s what investors want to see. They’re going to throw $100,000 a month at paid ads. They’re going to dump all this money into LinkedIn. They’re going to cast a huge fishing net to capture everyone they want.

But here's the thing about huge nets: you’re going to catch a lot of trash. It's an enormous task for marketers. It burns a lot of waste and energy to operate in that way. 

The economic landscape right now limits marketers from casting a wide net like they have been previously. From DTC eCommerce to SaaS, we’re seeing costs cut across the board in labor and marketing spend. And that’s happening while the cost of acquisition in digital advertising has skyrocketed. Many teams right now are dealing with a highly suspicious and risk-averse buyer, and they have fewer resources, headcount, and budget to go after them than ever in many cases.

The internet marketing gold rush is over; welcome to our new era of more tactical, lightweight marketing.

So, if you have 1,500 potential buyers in the entire universe, let’s say half of them are happy with your competitor and it will take years of long-game selling to convince them to switch over. The other half of your potential market isn’t all hanging out in one easy Slack group you can infiltrate. They’re human beings living all around the world. 

My main critique of B2B marketing is that it assumes your audience is big and grabbable, when your audience is actually tiny and dispersed.

If businesses are focused on quantity, do they understand their buyers?

A lot of founders don't know their buyer at all. Often, they make a decision to fix a business problem they’ve heard about secondhand and before they’ve talked to a single potential end user, just because it looks profitable to solve on paper. How can you pour sleepless nights and pitch VCs every six months for a problem that isn’t personal to you? Or worse, a founder talked to three people with the same job title, made a lot of creative but wacky assumptions, and jumped in with both feet. 

On the whole, I love entrepreneurs’ unique brand of audacity—that drive to press “go” first and figure it out later—but this approach can also cause harm. Are you aware of the spaces you’re entering, who is in them, and what they need? Are you barging in without adequate information into a conversation that your buyers have been having for decades, before you were born? Did you listen first before solving? Do you keep listening?

When these eager, audacious, adventurous (but perhaps a bit disconnected) founders hire marketers, as they must, those marketers step into an ecosystem where their founder isn't emotionally in tune to their customers. That means that content marketers have to translate a pitch deck that says something truly fantastical like, “We’re Uber for data observability” into an actual story and then take that hopefully more compelling message to their buyer. But there’s only 800 of those buyers in the world, and they’re not all easily reached in one place. It’s a deeply broken system.

I’m encouraged by some ideas like Account Based Marketing (ABM). It’s marketing with a relentlessly specific lens. A lot of companies have also pivoted toward hiring product marketing first, which I think is the correct approach. I recommend startup founders actually have messaging for their product before they hire somebody else to write about it.

Product-led companies dominate the Forbes Cloud 100—Stripe, Databricks, Canva, Miro, Figma, Airtable. Instead of targeting one or two buyers in each account, they’re chasing end users. Is PLG the path to faster and more sustainable growth?

Product-led growth is really exciting, although it’s a little buzzy. I love that you have literal proof that these companies are doing well. It's interesting, especially for builders and tinkerers and writers and creators, to solve a compelling problem by working directly with your end user.

It's the difference between coercive marketing and service-driven marketing. Service-driven marketing parallels product-led growth. It’s all about sharing effective information and education with your end user and making them feel empowered.

I think PLG is a fancy acronym for designing and selling products at the speed of humanity, not the artificial speed of the market. Because this is all just humans doing humanity, right? I don’t care how shiny your dashboard is or how powerful your API is. What’s really happening when you’re marketing software is that you’re changing people’s day-to-day lives.

There’s often a hidden life change tucked inside of SaaS products when sold to the correct person.

Think about it: If your main point of contact can effectively execute a software deployment at a large organization, it might change their career—a promotion, a raise, they can have a kid or buy a house. You can change their life. If you think that way about marketing to your buyer, the way that you write changes.

That’s where PLG-informed marketing can really become magical, because it cares most about the reality of your user, not funding rounds or “whales.”

Let’s talk about the practicalities of service-driven marketing. If your competitor practices coercive marketing, how can you compete?

I agree with Myk Pono’s definition of the goal of marketing: “to control perception and change behavior.” Those are some pretty serious things to be doing for a living, and it’s not a morally neutral role. I hope no marketer takes that job lightly.

The job of a marketer is to present true information about a product or service to the correct person in a compelling way. If you can't motivate someone to choose your option over all others without telling the complete truth, you're pushing a non-consensual message that distorts reality. But if you can provide your information about your product truthfully and without force, your audience can engage with you consensually. 

In a world where a lot of folks default to exploitive, non-consensual, invasive marketing, it's going to be tough to be ethical. Here’s the thing: Do it anyway. Be ethical anyway. Be relentlessly centered on the reason why your company exists and the problem it’s trying to solve. If you use that as your home base, for product, for content marketing, for everything your company does, you can’t go wrong.

Perspectives is a weekly series interviewing the best marketing leaders. Subscribe to get new interviews in your inbox every week.